Americans over 45 don’t think about long term care very much, and they are usually wrong when they do. They don’t know how often long term care is needed, what it costs, or how to prepare for it. This is particularly disturbing because seven out of ten Americans who reach age 65 will need long term care at some point in their lives.
Here are four common misconceptions about long term care, according the American Association of Homes and Services for the Aging, an association of not-for-profit organizations:
Medicare pays for nursing home stays. Fifty-nine percent of Americans over 45 believe that Medicare pays for extended nursing home stay. This is not true. Medicare pays for rehabilitation services after a person is discharged from a hospital, not extended nursing home care.
Medicare pays for assisted living. Fifty-two percent of Americans over 45 believe Medicare pays assisted living costs. This is also incorrect. Eighteen percent of Americans over 45 admit that they do not know who will pay for their long term care costs.
Living in a nursing home costs less than $60,000 a year. The average cost of a private room in a nursing home is $74,806 per year. Ninety-two percent of Americans over 45 were unable to estimate nursing home costs within 20 percent of the actual cost. A fifth of Americans over 45 admitted that their estimates were “just a hunch.”
Living in an assisted living facility costs less than $26,000 a year. Wrong again. The cost of living in assisted living facility currently averages $32,572 annually. More than 75 percent of Americans over 45 were unable to estimate assisted living costs within 20 percent of the actual cost.
By 2020—less than 15 years from now—12 million Americans will need long term care. Even so, only 7 million Americans have long term care insurance in effect today. Unless the 5 million uninsured take out long term care policies, they will have to sell off their assets—including their homes—in order to pay for care or to meet the eligibility requirements of low-income programs such as Medicaid.
